LED Fab Equipment Spending to Decline 18% in 2012

SAN JOSE, Calif. —
January 4, 2012 —
Following a massive 36 percent increase in equipment spending in 2011,
worldwide LED manufacturing equipment spending is projected to decline 18
percent in 2012, according to the latest Opto/LED FabWatch and Forecast from
SEMI. Worldwide LED manufacturing
capacity is expected to reach two million wafers in 2012 (4” equivalent per
month), a 27 percent increase
over 2011.

After
several years of rapid capacity expansion driven by high-brightness light-emitting
diodes (HB-LED) used in TV backlighting applications— reinforced by lucrative
government incentives and economic development funding in China— a 40 percent
decline in world metal organic chemical vapor deposition (MOCVD) purchases in
2012 will reduce overall LED equipment spending for the first time in over five
years. Spending for non-MOCVD equipment,
however, particularly in lithography, etch, test and packaging equipment will
increase in 2012, as manufacturers optimize their production lines and improve
their product designs.

While
HB-LED demand continues to grow in solid state lighting, HB-LEDs used in liquid
crystal display (LCD) TV backlighting units— presenting approximately 40
percent of the total HB-LED market— failed to reach growth expectations in 2011.
Total TV unit sales missed growth targets and the penetration of LED
backlighting as part of total LCD TV unit sales did not reach the levels that many
experts predicted. LEDs used in solid state lighting, currently totaling
approximately $2.5 billion, may exceed $30 billion by 2020, according to many
estimates.

“Similar
to other microelectronics industries, LED manufacturing capacity and technology
investments will vary year-over-year, but will correspond with the long-term
demand driven by key applications; in LEDs, this will be primarily solid state
lighting,” said Tom Morrow, executive vice president, Emerging Markets Group,
at SEMI. “Future equipment and capital
spending will drive LED cost reduction through larger wafers, automation and
dedicated equipment specifically designed to improve to
LED manufacturing yield and throughput.”

Regional
equipment spending shows China continuing to lead with an expected $719 million
planned for 2012, followed by Taiwan ($321M), Japan ($300M) and Korea ($260M).
Taiwan will continue to lead in capacity at 25 percent of the world LED capacity,
followed by China at 22
percent of world LED capacity. In regards to new fabs, SEMI recorded 29 new LED fabs in 2011. For 2012, SEMI
forecasts 16 new fabs coming
online next year.

Looking
at the back-end of the LED market, the recent Global Semiconductor Packaging
Materials Outlook by SEMI and TechSearch Inc. shows very strong growth in LED
leadframe shipments. Following the 69 percent unit shipment growth in 2010, LED
leadframe shipments are estimated to increase by another 10 percent in 2011. In 2012, shipments are forecasted to reach
almost 83 billion units shipped. Data
are based on shipments reported by sixteen leadframe suppliers.

Estimated
LED Leadframe Unit Shipped Globally (in billions of units)

2008

2009

2010

2011F

2012F

35.7

39.5

66.9

73.6

82.7

The
SEMI Opto/LED Fab Forecast tracks over 250 Opto/LED fabs activities worldwide,
with detailed information on fab construction and equipment spending, key
milestone dates, capacity and ramp up schedule, and more. Portions of this press
release were derived from the Opto/LED Fab Forecast. This database is an
essential business tool for any company keeping track of the Opto/LED front-end
fabs. For more information, visit: www.semi.org/en/Store/MarketInformation/OptoLEDFabForecast

About SEMI

SEMI is the global industry association serving the nano-
and microelectronics manufacturing supply chains. SEMI companies are the engine
of the future, enabling smarter, faster and more economical products that
improve our lives. Since 1970, SEMI has been committed to helping members grow
more profitably, create new markets and meet common industry challenges. SEMI
maintains offices in Austin, Beijing, Bengaluru, Berlin, Brussels, Grenoble,
Hsinchu, Moscow, San Jose, Seoul, Shanghai, Singapore, Tokyo, and Washington,
D.C. For more information, visit www.semi.org.